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Navigating a new direction for

maximum portfolio performance

2009 Managing Portfolio

Investments Survey
2009 Managing Portfolio Investments Survey

Jeff Johnson Hector J. Cuellar

Executive Managing Director President
RSM McGladrey Inc. McGladrey Capital Markets LLC

RSM McGladrey and McGladrey Capital Markets would like to thank the nearly 100 private equity
senior executives and professionals nationwide who provided their information and insight for our
March 2009 survey. The participants shared current concerns and business practices related to the
management of their portfolio companies.

The research in this report reveals a range of business practices and trends among survey
participants involved in a cross section of fund sizes and types.

Faced with a difficult economy and an anemic dealmaking environment, survey respondents have
shifted their focus from acquiring new platform portfolio companies to managing the performance
of existing investments. Information collected provides strong evidence of active monitoring and
involvement with portfolio companies. Eighty-five percent of funds participating in the survey report
that communication with portfolio companies has increased in the past six months—and as many
are in contact with their portfolio companies on a weekly and daily basis.

The report provides an inside look at the key areas and priorities private equity executives are
focused on to maximize portfolio performance. Consider the following:

• Acquiring new customers, expanding existing customers and enhancing existing products and
services are the top three portfolio company growth initiatives in 2009.

• Add-on acquisitions are the most frequent management activity being considered in today’s
environment. Workforce reductions, working-capital management and salary freezes are the top
three activities already implemented in response to the current economy.

• More than half of the respondents identified corporate strategy as the area they will focus on
most to increase portfolio company performance and value.

These and other findings provide insight into how your peers are managing their portfolio
investments and may serve as a way for you to examine new ideas for your own business practices.


Executive summary 2
Portfolio management and monitoring 3
Transaction and investment information 13
Respondent demographics 21
Executive summary
The 2009 Managing Portfolio Investments survey environment, while another 10 percent are actively
report provides research collected from nearly 100 considering such actions.
private equity senior executives and professionals.
Significant majorities are also focusing on working-
With private equity executives turning their attention capital management (83 percent), salary freezes (75
to the management of their existing portfolio percent), business process improvements (71 percent)
investments, the survey reveals activities and and reductions in capital spending (68 percent).
initiatives survey respondents are focusing on to
improve portfolio performance and profitability. High priority growth initiatives

The following is an overview of key findings from Acquiring new customers, expanding existing
the survey: customers and enhancing existing products and
services are the top three portfolio company growth
Areas of concern initiatives in 2009. These top initiatives appear to
be aimed at investments that are likely to bring the
Survey respondents ranked a weak economy, the
quickest return and require the least amount of
ability to meet business forecasts, and the potential
for defaults on loan covenants as their primary
concerns for 2009. Anecdotal observations suggest Areas of focus to increase portfolio company
financial institutions that lend to private equity firms performance
share these concerns.
Respondents identified corporate strategy as the area
Key management activities where they will focus most on increasing portfolio
company performance and value. This is followed by
Almost nine out of ten (88 percent) survey
operations and cash management—not surprising
respondents said they have implemented workforce
given the current marketplace where top-line growth
reductions in response to the current economic
is extremely difficult.

Survey methodology
In March 2009, RSM McGladrey and McGladrey Capital Markets asked private equity executives across the U.S. for information
related to the management of their portfolio companies. This survey report is intended to provide insights into the current state
of managing portfolio companies owned by private equity groups. Respondents shared information on key concerns and growth
initiatives, as well as deal sources, industry and geographic investment focus, and the impact of important tax matters and
accounting issues.

A total of 99 surveys were completed, with respondents representing a cross-section of fund types, including buyout funds,
mezzanine funds and venture funds. Fund sizes ranged from less than $100 million in assets to more than $3 billion

All private equity responses in the survey are weighted equally.

2009 Managing Portfolio Investments Survey

Portfolio management and monitoring

Indicate the top three growth initiatives for your portfolio companies in 2009
Acquiring new customers, expanding existing customers and enhancing existing products and services
are the top three portfolio company growth initiatives in 2009. These
top initiatives appear to be aimed at investments that are likely to
bring the quickest return and require the least amount of capital. When Survey findings indicate reporting
implemented, these strategies should also bolster EBITDA results and funds are in cost-containment mode
enhance portfolio company value. and are not currently looking to
More than 40 percent of reporting funds indicate add-on acquisitions make large investments. However,
as a growth initiative—as highlighted by the large number of with acquiring new customers as the
respondents mentioned later in the report who are considering add- top growth initiative, there is still an
on acquisitions as a key management activity in light of the current opportunity to expand customer base
economic environment. through smaller acquisitions.

Top growth initiatives in 2009

Acquire new customers

Expand existing customers

Enhancement of existing products and services

Add-on acquisitions

Pricing adjustments

New product or service lines

Domestic geographic expansion

Increase branding recognition

Increase international sales

Increase in size of sales force

Increase in R&D investments

Seeking joint ventures

Vertical integration

0% 10% 20% 30% 40% 50% 60% 70% 80%

How closely will you focus on the following areas to increase portfolio company
performance and value?

Areas of focus to increase portfolio company performance and value

Least focused Most focused

Corporate strategy


Cash management

Finance and accounting

Level of funded indebtedness

Human resources


Information technology

Legal matters

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Respondents identified corporate strategy as the area

where they will focus most on increasing portfolio
While deferring IT spending helps preserve cash in the
company performance and value. This is followed by
short term, it could have long-term drawbacks:
operations and cash management—which makes sense
given the current marketplace where top-line growth is
• Possible loss of competitive position
extremely difficult.
• Potential for increased security breaches
• Diminished capacity to recover from disasters
Survey findings indicate information technology is
• Pent-up demand for new technology may detract
not a current focus area for driving portfolio company
from other strategic initiatives
value and performance. This is not surprising given
that—for reasons such as cash preservation and expense
reduction—technology infrastructure spending for many
companies has come to a near halt in the midst of the
current economic crisis.

2009 Managing Portfolio Investments Survey

In light of the current economic environment, which activities have you considered
implementing or have implemented at your individual portfolio companies?
In light of the current economy, more than
80 percent of respondents have already
implemented workforce reductions Add-on acquisitions are the most frequent management activity
and working capital management being considered in today’s environment, showing a shift from
improvements. The next three most buying platform companies to making add-on acquisitions to an
commonly implemented activities existing platform. In spite of the slowing economy, well priced
include salary freezes, business process add-on acquisitions provide an opportunity to increase sales while
improvements and reduced capital growing platform company value and market share.
spending—with more than 68 percent of
survey participants indicating that they
already implemented these activities. Survey data indicates the responding funds have been very proactive in
implementing initiatives to mitigate losses or improve cash flows in the economic slowdown.

Management activities
Implemented Considering Not considering

Workforce reductions

Working capital management

Salary freezes

Business process improvements

Reducing capital spending

Strategic planning

Seeking pricing increases

Providing additional capital

Restructuring, turnaround assistance


Add-on acquisitions

Sale of business, divisions or product lines

Consolidate vendors across portfolio companies

Coordinate employee benefits across portfolio companies

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%
Larger reporting funds, defined in this report as funds with more than $500 million in assets, are more
likely to be considering or are already providing additional capital, as well as implementing restructuring or
turnaround assistance at some of their portfolio companies.

Fewer than 20 percent of respondents have sold portfolio company businesses, divisions or product lines and
more than half have not even considered doing so—suggesting that not only are owner operators delaying
selling businesses in this environment, but so are private equity firms. This means there will be a mountain of
exits building because with most of the investments, there is a commitment to get the money back within five
to 10 years.

As related to your portfolio companies, how concerned are you about each of the
Respondents say the top three concerns related to their portfolio companies are the economic outlook,
meeting business forecasts and potential loan covenant defaults. The next greatest concerns include lack of
financing for new deals and lower valuations of portfolio companies.

Based on further breakdown of survey respondents, venture funds—as might be expected—are more
concerned about the need to contribute capital to existing portfolio companies and lower valuations of
existing portfolio companies. Venture funds are also the respondents most concerned about the lack of an
IPO market as an exit strategy.

Concerns for portfolio companies

Economic outlook

Meeting business forecasts

Potential loan covenant defaults

Lack of financing for new deals

Lower valuations of existing portfolio companies

Need to contribute capital to existing portfolio companies

Lack of management capabilities to weather storm

Employee reductions at portfolio companies

Lack of access to capital to grow business

Need to refinance existing business

Potential tax law changes coming

Lack of acquisition opportunities

Lack of active IPO market for exit strategy

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Average rating (1 = not concerned, 5 = very concerned)

One respondent cites “the ability to retain key employees as stock options lose value” as a concern. While repricing stock
options may seem like a viable solution, the accounting treatment for repricing stock options (under SFAS 123R) can have
unexpected implications on a company’s bottom line. There are two key facts to be aware of:

1. The company will continue to record compensation under the old plan.
2. The company must record additional compensation expense for the difference between the value of the old stock option
and the value of the new option.

Depending on the number of options and the fair value differential, the company can have a large unexpected hit to
compensation and earnings.

2009 Managing Portfolio Investments Survey

Most important key metrics for monitoring your portfolio companies in addition to
monthly financials
In measuring performance, reporting funds are focusing on working capital levels,
loan covenant compliance, product line profitability, backlogs and productivity Falling backlogs can
as the most important key metrics for monitoring portfolio companies. As fund be a leading indicator
size increases, product line profitability takes on increased importance. of declining financial
performance. Be sure
Most important key metric for monitoring portfolio companies to look at comparative
Not important Very important backlogs over time.
Working capital levels

Loan covenant compliance

Product line profitability



Customer profitability

Customer gains or losses

Debt/equity levels

Customer financial health

Competitor performance

Employee turnover

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Most important key metrics for monitoring portfolio companies by fund type
Buyout funds Mezzanine funds Venture funds

Based on further breakdown of Working capital levels

survey respondents, venture
funds identified backlogs and Loan covenant compliance
product line profitability as the
two most important key metrics Product line profitability
beyond monthly financials. This
is consistent with the role that Productivity
venture funds play with early
stage companies. Backlog

Given that unplanned Customer profitability

employee turnover decreases
significantly in a down Customer gains or losses
economy, respondents cited
this as the least important Debt/equity levels
metric currently being
monitored. Customer financial health

Competitor performance

Employee turnover

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Average rating (1 = not concerned, 5 = very concerned)
How often are you in contact with the portfolio company management team?
With the difficult economic climate, 85 percent of respondents report that communication with portfolio
companies has increased in the past six months. Survey data provides strong evidence of active monitoring
and involvement with portfolio companies. The majority of funds participating in the survey—86 percent—are
in contact with their portfolio companies on a weekly and daily basis.

Frequency of contact with portfolio company Has contact with portfolio companies increased
management team in the past 6 months?

1% — Semi-annually
85% — Yes
13% — Monthly 0% — Quarterly
15% — No

21% — Daily

65% — Weekly

2009 Managing Portfolio Investments Survey

Top three fund-level management priorities

In both 2008 and 2009, the top three fund-level management priorities include managing existing fund
portfolio companies, looking for new acquisitions and looking for add-on acquisitions.

Few respondents—less than 15 percent in 2008 and 2009—report planning a sale of a portfolio company as
a top three priority, which supports the widespread notion that maximizing value in a sale is a significant
challenge in the current market.

With fewer acquisitions taking place, obtaining financing for acquisitions is a low priority for reporting funds.

Fund-level management priorities

2008 2009

Managing existing portfolio companies

Looking for new acquisitions

Looking for add-on acquisitions


Positioning current portfolio companies for sale

Refinancing existing portfolio companies

Modifying portfolio company strategies

Sale of existing portfolio company

Looking for financing for acquisitions

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Importance of the tax matters at your portfolio companies

Importance of tax matters at portfolio companies

Not important Very important

Federal tax planning

State and local tax (SALT) compliance

NOL tax loss utilization

Manufacturers’ deduction

LIFO inventory valuation

Research and experimentation tax credits

International tax planning

Tax incentives on international sales

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Federal tax planning, state and local tax (SALT) compliance and net operating loss (NOL) utilization were
the three most important tax matters noted by respondents. Federal tax planning applies to all companies
and would be expected to be of the most importance. On the other hand, tax incentives on international sales
and international tax planning were rated by more than half as not important, most likely due to portfolio
companies with few or no significant international operations.

Survey findings show that respondents aren’t placing a high level of importance on research and
experimentation, manufacturers’ deduction and tax incentives on international sales. However, these areas
present tax saving opportunities and could help to increase much-needed cash flow at distressed portfolio

State and local tax compliance continues to be an area where due diligence issues are often found with privately held
companies bought by private equity firms—due to the challenges they face complying with the laws of multiple state and
local tax jurisdictions.

For buyers of portfolio companies with positive EBITDA, but with tax losses from the amortization of intangibles, NOL
utilization is becoming increasingly important. In a slowing economy, the tax losses may become a larger part of a deal

The American Recovery and Reinvestment Act of 2009 has already outlined new tax provisions and as regulations continue
to change, tax matters are an area to keep an eye on.

2009 Managing Portfolio Investments Survey

How focused are you on managing each of the following accounting areas/issues?
Not surprisingly, more than 50 percent of respondents
indicate they are very focused on SFAS 157 reporting SFAS 157 requires even more rigorous evaluation and
(change in definition of fair value). The valuation of fund support for the valuation process and determination
portfolio holdings at the end of 2008 was impacted by of multiples. In most cases, more than one approach to
both lower multiples and in many cases, lower earnings or determine value is commonplace. The underlying premise
EBITDA. of SFAS 157 is market participants—not the actual
Forty-two percent of respondents are very focused on buyer—in a specific transaction. The focus of value is on
the lack of timely and accurate financial reporting at the exit price and not the purchase price, which has far-
their portfolio companies. This suggests that for the hard reaching implications in numerous areas of fair value.
decisions responding funds are facing in today’s economy,
having reliable financial information is of critical
Focus on managing accounting areas/issues
Not focused Very focused
SFAS 157, increased fair value accounting requirements

Lack of timely and/or accurate financial reporting at

portfolio companies

Lack of internal controls at portfolio companies

Inadequate accounting resources or expertise

Goodwill impairment issues

Delays in financial statements as a result of required

loan covenant waivers

Effects of SFAS 141R business combination accounting

Increased costs for valuation experts

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Forty-five percent of responding funds are not focused on the effects of SFAS 141R (reporting for business
combinations). SFAS 141R went into effect in 2009 and the significant impact it will have on financial reporting at
portfolio companies may not be fully understood yet—which could have contributed to the lower focus.

Under SFAS 141R, the most profound change is the use of a fair value model rather than a cost allocation model. As a result,
private equity groups and portfolio companies will have to work through a number of new issues:

• Contingent consideration and earn-outs included in purchase agreements now require estimates and a current valuation as
part of the initial purchase price allocation, rather than deferred treatment.
• Transaction costs are no longer considered part of the acquisition.
• Defensive assets will have to be considered and valued, if appropriate.
• Under the revised definition of a business, there could be more reporting units to test. Also, Step 2 under SFAS 142 will be
under the guidance of SFAS 141R.

How concerned are you about the following working capital management issues facing
your portfolio companies?
The three principal working capital issues cited are past due collection management, customer credit
monitoring and inventory management. As respondents’ fund size increases, so does the concern over
customer credit monitoring. This area may get more focus as the recession drags on.

Working capital management issues facing portfolio companies

Past due collection management

Customer credit monitoring

Inventory management

Vendor financial stability

New customer credit approval

Managing trade credit payment terms

Customer returns

Customer not meeting minimum purchase commitments

1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0

Average rating (1 = least concerned, 5 = most concerned)

What board level activities does your fund maintain and participate in?
More than 90 percent of all respondents report involvement in key management oversight activities at their
portfolio companies, with high levels of participation in board meetings and the review and approval of
annual budgets.

Board level activities

Attend board meetings one or more times a year

Have one or more board seats

Review and approval of annual budgets

Strategic planning

Review performance of management team

Compensation and bonus determinations

50% 60% 70% 80% 90% 100%

2009 Managing Portfolio Investments Survey

Transaction and investment information

Investment focus by industry or sub-industry

Investment focus by industry

Business services
Consumer products
Information technology
Food & beverage
Financial services
Engineering, construction and building
Governmental contracting & services
Other technology

0% 10% 20% 30% 40% 50% 60%

With 40 percent of respondents focused

on investments in multiple industries, Food manufacturers competing in non-commoditized categories with
survey data indicates that responding little private-label threat will fare the best in the current environment
funds consider themselves widely where commodity prices are falling and price hikes pushed through
diversified. The largest specific focus is in 2008 remain sticky, according to McGladrey Capital Markets’ Food &
on manufacturing/distribution, followed Beverage Review (2009: Q1).
by business services, consumer products
and health care. The uncertain economic environment is also drawing capital into the
Certain industries appear to be weathering relatively stable food sector and large manufacturers may begin taking
the difficult economic climate and are advantage of lower valuation multiples.
remaining relatively stable. According to
McGladrey Capital Markets’ Consumer
Products & Services Review (2008: Q4),
despite overall dampened consumer sentiment, some sectors within the consumer products industry have
demonstrated remarkable resiliency and, in fact, are expected to grow in 2009.

In contrast, technology providers continue to struggle to simply maintain revenue numbers. And while
information technology is still a focus for more than 20 percent of responding funds, the experts within
McGladrey Capital Markets’ Technology Group expect that as enterprises continue to delay IT expenditures, M&A
volume will be down for remainder of the year.

Industries least focused on by respondents include retail, chemicals and other technology.

Which of the following do you expect to be the most difficult issue you will encounter in
closing deals during 2009?
The majority of funds—57 percent—
expect difficulty raising capital or One respondent cites “seller value expectations” as an obstacle to closing deals in
acquisition debt financing to be 2009. Many sellers’ expectations aren’t aligned with the current market. For deals
the largest obstacle for closing to close in this environment, the gap between buyer and seller expectations must
deals in 2009. be bridged—allowing buyers to maintain their confidence and comfort level and
protecting sellers against eroding values and retrading purchase prices. To achieve this,
sellers must go to market with optimal financial transparency and credibility.

Most difficult issue in closing deals in 2009

25% — Decreasing values of acquisitions 3% — Operational issues

targets due to declining performance
3% — Due diligence issues

12% — Not meeting monthly 57% — Raising capital or

projections prior to close acquisition debt financing

2009 Managing Portfolio Investments Survey

What are the most frequent deal sources for your portfolio company acquisitions or
Private sale (non-auction) deals, boutique investment bank managed deals, middle-market investment bank
managed deals, and management buyouts are the most frequent deal sources reported. When considering
the fund size of the respondents, survey data indicates that this does not impact the frequency of deal
Most frequent deal sources
Not frequent Very frequent

Non-auction, private sale deals

Boutique investment bank managed deals

Middle-market investment banker managed deals

Management buyouts

Partner with industry executives to find deals

Corporate divestiture or carve outs

Participate on transactions with other funds

Sales by other private equity firms

Large investment bank managed deals

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Fifty-six percent of respondents don’t frequently participate with other

While sales by other private funds on transactions. Large investment banks and sales by other PE firms
equity firms is not a frequently are the least frequently reported deal sources.
reported deal source, this may
change as more and more
companies become private
equity-owned. And given that
there are differing philosophies
on how to improve a company,
one private equity firm’s “trash”
might be another’s “treasure.”
As a result, those companies
may be owned multiple times.

Funds invested
Sixty-five percent of respondents had more than 40 percent of their
current fund invested and 35 percent have less than 40 percent
invested. This data indicates there is still a significant amount of
capital yet to be deployed. In this challenging economy, most private
equity firms are likely to invest in companies that don’t compound
their troubles, but rather help improve overall returns—which means
sound businesses will still get sold and less stable companies likely will
continue to struggle to find a buyer.

Funds invested

81% to 100%
Percentage of funds invested

61% to 80%

41% to 60%

21% to 40%

0% to 20%

0% 5% 10% 15% 20% 25% 30%

Percentage of respondents

Funds in fundraising
Thirty-five percent of respondents report having one or more funds
in fundraising—a bit surprising in light of the widely-reported difficult
fundraising environment. But while fundraising remains challenging, the
buying binge in the last few years created a need for more capital, and
even a down market presents buying opportunities.

Number of funds in fundraising

35% — One or more funds in fundraising

65% — Not active in fundraising

2009 Managing Portfolio Investments Survey

Services performed internally vs. externally (outsource) during the acquisition process
or subsequent to the acquisition
Eighty-five percent of respondents outsource tax due diligence services. This is followed by tax structuring
assistance, with 82 percent of responding funds using external resources for this service. This data suggests
that respondents recognize the benefit of specialized expertise for effective tax planning.

More than 40 percent of survey participants perform

Information technology assessments are the third- operational assessments internally. This seems to
highest outsourced service, which is likely due to the indicate that responding funds are typically buying
need for a deep understanding of technology trends, companies in industries where they have industry
information security issues and effective technology experience and expertise.
governance. Specialized expertise can be helpful, if
In comparison, the majority of respondents use both
not necessary, to identify effective IT strategies—such
external and internal resources to conduct market and
as integration opportunities—as well as inadequate
industry analysis (70 percent) and recruit management
information systems that may create a severe risk or
positions (60 percent).
future investment requirement.

Services performed internally vs. externally

Internal Both External
Tax due diligence

Tax structuring assistance

Information Technology (IT) assessments

Purchase price allocation studies

Internal audit

Information technology planning and systems selection

Executive assessments and background checks

HR assessments

M&A advisory

Recruiting of management positions

Executive compensation plans and studies

Financial due diligence

Operations assessments

Market and industry analysis

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

What percentage of stock or equity do you target to own in a typical acquisition or
More than 65 percent of reporting funds target a controlling interest in a typical acquisition or investment.
Based on further breakdown of survey respondents, the majority of reporting mezzanine funds target
ownership of less than 25 percent and venture fund respondents generally target ownership of 50 percent
or less.

Targeted percentage of stock or equity ownership in an acquisition or investment

More than 80%

Percentage of targeted ownership

50% to 79%

26% to 49%

0% to 25%

Not disclosed

0% 5% 10% 15% 20% 25% 30% 35%

Percentage of respondents

Where are most of your acquisitions or investments located?

Nearly 70 percent of respondents make investments nationwide, which appears to indicate responding
funds are more interested in finding the right investments and location is of lesser importance. Interestingly,
even in today’s global environment, only 2 percent of responding funds make most of their investments

Location of acquisitions or investments

15% — Regional, over 500

miles from fund office 2% — International

14% — Local or within 500

miles of fund office

69%— Nationwide, anywhere in U.S.

2009 Managing Portfolio Investments Survey

What is the typical revenue size of your platform portfolio companies?

Most respondents—nearly 75 percent—acquire or invest in companies with revenues of $10 million to $100
Revenue size of platform companies

12% $100 to $500 million

74% $10 to $100 million

10% Under $10 million

3% Pre-revenue, start-up stage

12% $500 million to $1 billion

How many transactions did your fund close in 2007, 2008 and 2009 YTD?
More than 30 percent of responding funds closed two to three transactions in 2007 and 2008. As expected,
overall deal activity fell in 2008 from 2007. With half of the respondents not yet closing a deal as of March
2009 (when the survey was conducted), the year is off to a slow start. As expected, survey data indicates that
the larger the fund size, the more transactions the responding fund closed in 2009—which is the same for
2008 and 2007 as well.
Transactions closed in 2007, 2008 and 2009 YTD
2007 2008 2009 YTD


2 to 3

4 to 5

6 to 10

More than 10

0% 10% 20% 30% 40% 50% 60% 70%

How many portfolio companies do you currently own or invest in?
Nearly 35 percent of reporting funds have invested in six to 10 portfolio companies. This is consistent with the
fund sizes of survey respondents.

Number of portfolio companies currently owned or invested

0 to 5

6 to 10

11 to 30

31 to 50

More than 50

0% 5% 10% 15% 20% 25% 30% 35% 40%

2009 Managing Portfolio Investments Survey

Respondent demographics

Primary fund type Employees

Primary fund type by respondent Number of professionals in responding organizations

12% — Venture funds 1% — Other 5 or fewer people

74% — Buyout funds

13% — Mezzanine funds 6 to 10 people

11 to 20 people

21 to 30 people

More than 30 people

0% 5% 10% 15% 20% 25% 30% 35%

Position of respondent Number of active funds by respondent

Position Percentage Active funds currently Percentage

investing of respondents
Managing Director, Managing Partner 40%
0 1%
Principal 19%
1 73%
Vice President 16%
2 18%
Chief Financial Officer 10%
3 3%
Senior Vice President or Partner - Deals 7%
4 5%
Associate 6%

Senior Vice President or Partner - Operations 2%

Asset value under fund management

Over $1 billion

$251 to $999 million

$100 to $250 million

Less than $100 million

0% 5% 10% 15% 20% 25% 30% 35% 40%

2009 Managing Portfolio Investments Survey

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About McGladrey Capital Markets

McGladrey Capital Markets LLC ( is a global provider of investment banking services to private and public
companies with annual revenues of up to $1 billion. The firm’s services include mergers, acquisitions, divestitures,
recapitalizations, capital raising, fairness opinions and restructurings. McGladrey Capital Markets, which offers in-depth expertise
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